BEIJING, May 24 (Xinhua) -- Sentiment in China's property market has rallied swiftly as the government's strong policy support boosts market expectations for the gradual stabilization of the real estate sector.
"These past few days have been incredibly hectic for us," a sales agent surnamed Lu said at an outlet of real estate chain Lianjia in Beijing's Chaoyang District. "Even on workdays, few agents are present in the office as most of the agents are out for property viewings," Lu said.
Last Friday, Chinese authorities unveiled a slate of highly anticipated policies aimed at bolstering the property market. These include lowering the minimum down payment ratios for individuals' commercial housing mortgages to 15 percent for first-home purchases and 25 percent for second-home purchases; and the abolishment of the floor level of commercial mortgage rates for first and second homes across the country.
The country has also decided to establish a 300-billion-yuan (about 42.19 billion U.S. dollars) relending facility for the government-subsidized housing project. Local state-owned enterprises are encouraged to use the funds to buy reasonably-priced commercial homes that have completed construction and turn them into affordable housing.
These stimulus policies immediately bolstered trading activity in the property market. In Beijing alone, over 2,000 resold homes were traded over the weekend, following the policy announcement, according to data from real estate agency Centaline Property.
Spurred by the support measures, some Lianjia clients have shifted from a wait-and-see attitude to showing heightened willingness to view properties and enter contract negotiations, Lu said. Both inquiries and in-person viewings surged over the past weekend, following the fresh stimulus, with inquiries nearly doubling compared to the previous week, Lu added.
"High-frequency data shows that the trading volume over the past weekend surged to a relatively high level for this year so far, and the influx of new clients hit a record high for the year, signaling a positive market response to the policies," said Gao Yuan, director of the Beijing Lianjia Research Institute.
The new-home market has also witnessed brisk trading in recent days. At a luxury real estate project in Shanghai's Huangpu District, all 75 units were sold just 45 minutes after the project opened for sales, resulting in a single-day sales revenue in excess of 3.1 billion yuan.
Over the last year, China has been working to prop up its sluggish property market, introducing various policies such as those to relax restrictions on home purchases in certain provinces and reduce mortgage rates.
"The most recent adjustment to housing financial policy has exceeded expectations, clearly signaling the government's resolve to stabilize the real estate market," said Dong Ximiao, chief researcher at Merchants Union Consumer Finance Company Limited.
These moves are conducive to rebuilding homebuyer confidence and improving the willingness to purchase, Dong added.
Liu Chan is among the many eager homebuyers incentivized by the supportive policies. "As soon as I learned about the new policies, I contacted my sales agent right away to negotiate with the homeowner," she said.
"It's an opportune time for homebuyers like me with rigid housing demands. The price of the property I'm interested in now fits within my budget. And I believe that home prices won't fluctuate greatly under the government's support," Liu said. "So there's no reason to wait any longer to buy a house."
Despite the boosted sentiment and improved market expectations, industry observers caution that the real estate market remains in a bottoming-out phase.
More time is needed to stabilize home prices as the impact of the real estate inventory backlog still lingers, said Zhang Dawei, chief analyst at Centaline Property.
Chen Wenjing, director of research at the China Index Academy, expects the policies will have a more pronounced effect in invigorating the real estate market once they are fully implemented. ■
